DHL 2005 Annual Report Download - page 75

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We successfully expanded the EXPRESS Corporate Division and continued to reinforce
its presence on all continents. e ability to link standardized and globally networked
business processes with the regional requirements and needs of the customers has been
a key factor in our success. We are continuing to expand our infrastructure in order to
further improve the quality of our services and at the same time leverage cost and earn-
ings potential. However, complex integration projects can sometimes result in temporary
restrictions in quality and thus to declines in revenue and earnings.
In the highly-competitive US market, our goal remains to dierentiate ourselves from our
competitors by providing high-quality and exible services. We are optimizing products
and costs and at the same time investing in transport networks, which provide the basis
for successful development of express business in the United States. In 2003, we acquired
Airborne Inc., which we have gradually integrated into the Group since then. e start of
operations of the air hub in Wilmington (Ohio) in September 2005 marked the comple-
tion of the nal major step in DHL’s integration process on the US market. As can be seen
on page 53, this process resulted in temporary declines in service quality and revenue.
However, we restored service quality levels aer only a short delay. We are assuming that
our nancial targets for the United States will not be negatively impacted in the long term
as a result of the above.
A routine citizenship test for US air carrier ABX Air Inc. ist still pending at the Depart-
ment of Transportation (DOT) in accordance with statutes. ABX Air Inc. is an indepen-
dent company that provides transportation services for DHL. e outcome and procedure
of this test are still open, even though there are certain similarities to the citizenship test of
Astar Air Cargo Inc. in 2003 and 2004, which the DOT decided positively.
External audits are currently underway at DHL Express (USA) and Airborne Inc. in line
with the US unclaimed property laws. ese laws state that assets with no owner must
either be returned to their rightful owner or transferred to the last known owner’s home
state, or if this is not known, to the state in which the company is domiciled.
In Asia, our aim remains to maintain or extend our leading market position and prot
from the expected development of key markets. However, should there be an unexpected
slowdown or overheating of markets, this could impact our revenue forecasts.
e threat of terrorist attacks could also have negative eects on our business, primarily
on our air-based express operations. Higher insurance premiums could not be excluded
in such an eventuality.
Material opportunities and risks in the LOGISTICS Corporate Division are linked to the
integration of logistics company Exel plc. Its geographical presence in the UK, the USA
and Asia complements our presence in continental Europe perfectly. As a result of the
move we are strengthening our leading position in the air and ocean freight markets while
also gaining expertise in contract logistics. As things stand at the present time, we do not
expect any particular integration risks.
Deutsche Post World Net
71
Risk Management
Group Management ReportConsolidated Financial StatementsAdditional Information